System and method for encouraging competitive participation in an auction

ABSTRACT

In both an on-line and a conventional auction, an auctioneer may encourage competitive bidding behavior through the provision of rewards to those bidders whose bids meet predetermined criteria. For example, a bidder may be rewarded if her bid exceeds a prior bid by a threshold value. An auctioneer may further discourage non-competitive bidding behavior by penalizing those bidders whose bids fall below predetermined standards.

CROSS-REFERENCE TO RELATED APPLICATIONS

This application is related to co-pending U.S. patent application Ser.No. 08/943,483 entitled “SYSTEM AND METHOD FOR FACILITATING ACCEPTANCEOF CONDITIONAL PURCHASE OFFERS (CPOs)” to Jay S. Walker, Daniel E.Tedesco, James A. Jorasch and Andrew S. Van Luchene filed on Oct. 3,1997, the entirety of which is incorporated herein by reference.

FIELD OF THE INVENTION

The present invention relates to auctions, and relates more particularlyto systems and methods for rewarding or penalizing bidders whose biddingbehavior during an auction session meets predetermined standards.

BACKGROUND OF THE INVENTION

Auctioning has been an accepted method for selling products and servicessince the early 1700's. Since that time, traditional auctions have beenconducted in auction houses where bidders would gather and competeface-to-face for the purchase of a particular item. Such traditionalauctions typically offer luxury items or antiques, whose prices commanda large profit. Thus, only those persons who can afford such “highticket” items participate in traditional auctions. Also, since mostauction houses are located in large cities such as London or New York,traditional auctions usually attract only those persons living near orhaving the means to travel to these auction houses. Such auctions arefurther limited to those people who are willing to pay the price ofadmission to the auction house.

With the development of world-wide communications systems, auctions haveevolved to include bidding via telephone and video-conferencing, thusovercoming the barrier imposed by travel. However, these auctions arestill typically limited to high ticket items, thus attracting only asmall proportion of the general public.

In recent years, and particularly with the advent of the Internet,auctioning has enjoyed increased attention and participation from thepopulation at large. This is demonstrated by the success of such on-lineInternet auctioning companies as EBAY and ONLINE.COM. These Internetauction companies allow for items of any value to be placed for bid ontheir web sites. Each item submitted for sale is assigned an auctionsession, which includes a starting time (or opening) and a closing time.Bids are then accepted electronically as long as the auction session isopen. At the close of the auction session, the item is awarded to thehighest bidder.

Although on-line auctioning has succeeded in attracting large-scale,daily participation in auctioning, the Internet environment hasinadvertently eliminated some of the benefits enjoyed by traditionalauctioning. For instance, the competitive bidding generated byface-to-face competition has been hampered, since on-line biddersusually are remotely located from each other. Furthermore, because thebidders in an on-line auction are not physically present at the auctionsite, they may not become instantly aware of higher bids submitted byother subsequent bidders.

Another drawback to on-line auctioning is the frequent submission ofunreasonably low bids during an auction session. These bids aretypically submitted by bidders who are not serious about obtaining theitem being auctioned or who anticipate that no reasonable bids will besubmitted. Such bidding behavior is a waste of an auctioneer'sresources, since such unreasonable bids are rarely accepted. However,since there is no face-to-face interaction among on-line bidders, thereis little incentive for a bidder to refrain from submitting unreasonablylow bids.

Thus, a need exists to encourage competitive bidding and to discourageunreasonable bid submissions in an on-line auction environment.

SUMMARY OF THE INVENTION

Generally, according to the instant invention, systems and methods aredisclosed for encouraging competitive bidding behavior during an auctionsession. Such systems and methods are advantageous in that theyencourage competitive bidding by providing rewards to bidders whosebidding behavior meets predetermined criteria. Additionally,non-competitive bidding may be discouraged through the institution ofpenalties when bidding behavior falls below predetermined standards.

According to a first aspect of the present invention, a system andmethod for providing a reward to a bidder participating in an auctionincludes: identifying a product subject to bidding during an auctionsession; receiving a bid for the product from a bidder during theauction session; determining, based on a reward rule, whether the bidderis qualified to receive a reward; and if the bidder is qualified,transmitting, to the bidder, an indication that the bidder is qualifiedto receive the reward.

According to a second aspect of the present invention, a system andmethod for providing a penalty to a bidder participating in an auctionincludes: identifying a product subject to bidding during an auctionsession; receiving a bid for the product from a bidder during theauction session; determining, based on a penalty rule, whether thebidder is to receive a penalty; and if the bidder is to receive thepenalty, transmitting, to the bidder, an indication that the bidder isto receive the penalty.

According to a third aspect of the present invention, a system andmethod for participating in an auction session includes: receiving anidentification of a product subject to bidding during an auctionsession; transmitting a bid for the product to an auctioneer during theauction session; and receiving a reward in response to the bid.

According to a fourth aspect of the present invention, a system andmethod for participating in an auction session includes receiving anidentification of a product subject to bidding during an auctionsession; transmitting a bid for the product to an auctioneer during theauction session; and receiving a penalty in response to the bid.

Further descriptions of the present invention are disclosed hereinbelow.

BRIEF DESCRIPTION OF THE DRAWINGS

A more complete understanding of the present invention, as well asfurther features and advantages thereof, will be obtained by referenceto the following detailed descriptions when read in conjunction with theaccompanying figures, of which:

FIG. 1 is a block diagram illustrating a network over which an auctionin accordance with the present invention may be conducted;

FIG. 2 is a block diagram illustrating the components of an auctionserver depicted in FIG. 1;

FIG. 3 depicts an exemplary auction inventory database stored in theauction server of FIG. 1;

FIG. 4 depicts an exemplary current auction database stored in theauction server of FIG. 1;

FIG. 5 is an exemplary bidder database stored in the auction server ofFIG. 1;

FIG. 6 depicts an exemplary offer rules database stored in the auctionserver of FIG. 1;

FIG. 7 depicts an exemplary reward rules database stored in the auctionserver of FIG. 1;

FIG. 8 is a flowchart illustrating the steps performed by the auctionserver of FIG. 1 during an exemplary offer determination process of thepresent invention;

FIG. 9 is a flowchart illustrating the steps performed by the auctionserver of FIG. 1 in accordance with an exemplary reward process of thepresent invention; and

FIGS. 10A-10B are a flow chart illustrating the steps performed by theauction server of FIG. 1 in accordance with an exemplary multiple bidderreward process of the present invention.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS

Definitions

The following words shall be construed to have the following meaningswithin the context of the present disclosure:

-   -   Auction: a public sale, conducted live or through an electronic        network such as a telecommunications system or the Internet, in        which products or services are sold to the highest bidder.    -   Bidder: a participant in an auction.    -   Buyer: the winning bidder in an auction.    -   High Bid: the bid provided by a bidder which currently exceeds        the value of all other submitted bids.    -   Greatest Bid: the high bid at the close of the auction    -   Bid Spread: the difference in pecuniary value between two        submitted bids.

Preferred Embodiments

Referring now to FIG. 1, an on-line auction system 100 includes anauction server 102, a third party terminal 106, a payment processingserver 108 and one or more bidder terminals 110, each connected throughnetwork 104. Auction server 102 is preferably operated by an on-lineauctioneer, and may be any type of conventional computer or computingsystem that includes the components described below in reference to FIG.2. Likewise, third party terminal 106, payment processor 108 and bidderterminals 110 may each be any conventional type of computer or computingsystem, such as an IBM personal computer or an IBM network server.Network 104 may be any type of network through which computers maycommunicate, such as a local-area network (LAN), a wide-area network(WAN), an intranet system, a public telephone exchange system, theInternet or any combination thereof.

Third party terminal 106 is preferably operated by a party other thanthe auctioneer or a bidder. A third party, in the present disclosure,offers a reward to qualified bidders participating in an auction held bythe auctioneer, as discussed further below. Payment processor 108 ispreferably operated by a financial clearinghouse, such as a credit cardclearinghouse, which is equipped to process, inter alia, payments fromthe bidder to the auctioneer. Bidder terminals 110 are preferablyoperated by one or more bidders participating in an auction conductedthrough auction server 102.

It is to be understood that in an embodiment where the present inventionis practiced in other than an on-line auction system, auction server102, third party terminal 106, payment processing server 108 and/orbidder terminals 110 may be replaced by their respective operatingparties, described above. In such case, network 104 may not benecessary.

FIG. 2 displays the components of auction server 102. These componentsinclude processor 200, random access memory (RAM) 202, read-only memory(ROM) 204, clock 206, communication port 208 and data storage device210. Data storage device 210 stores auction inventory database 212,current auction database 214, bidder database 216, offer rules database218, reward rules database 220 and program 222, discussed with referenceto FIGS. 3-7 below.

Processor 200 may be any commonly manufactured microprocessor chip, suchas the Pentium II® manufactured by Intel Corporation. Processor 200 runsat a clock speed (typically measured in megahertz (MHz)) determined byclock 206. Clock 206 may further be operative to measure the passage oftime in order to calculate a current time in which the auction server102 is operating.

Processor 200 is operatively connected to random access memory (RAM) 202and read-only memory (ROM) 204. RAM 202, which may be one or more singleinline memory module (SIMM) chips capable of storing a predeterminedamount of data (typically measured in megabytes), is used by processor200 for temporary storage of processing instructions during operation ofauction server 102. Read-only memory (ROM) 204 is at least one permanentnon-erasable and non-rewritable memory chip that stores initializinginstructions to be used by processor 200 during, for example, a start-uproutine performed by auction server 102. Further functions of randomaccess memory (RAM) 202 and read-only memory (ROM) 204 will be apparentto one of ordinary skill in the art.

Processor 200 is further operatively connected to communication port208, which may be one or more of the following commonly known computerperipherals used for computer-related communications: a parallel port, aserial port, a network card, a fax/modem/telephone port and/or anycombination of the same. Communication port 208 is operatively connectedto transfer data between processor 200 and network 104.

Processor 200 is further operatively connected to data storage device210, which may be any one of the following commonly known computerperipherals used for storing computer data: a hard drive, a floppy diskdrive, a DVD drive such as those manufactured by Phillips Electronics, aZIP drive such as those manufactured by IOMEGA, a tape drive, a DigitalAudio Tape drive and/or any combination of the same. Further suchdevices will be apparent to one of ordinary skill in the art. Datastorage device 210 may be further operative to store an operatingsystem, one or more application programs, or a web site run off ofauction server 102 each exemplified through program 222, in order tosuccessfully operate auction server 102 in accordance with the systemand method of the present invention.

FIG. 3 illustrates exemplary fields and data stored therein for auctioninventory database 212. These exemplary fields include auctionidentification (ID) field 300, auctioned item field 302, open time/datefield 303, close time/date field 304 and minimum starting bid field 306.For each record (e.g. each row) of auction inventory database 212,auction ID field 300 lists an auction identifier assigned by theoperator of auction server 102 to each auction to be conducted. Theauction identifier may be any alphabetic, numeric, alpha-numeric orother type of code, assigned so that each auction conducted on auctionserver 102 has a unique identifier. For example, the numbers “123” and“124” have been assigned to two such auctions, as listed in FIG. 3. Thedata in auction ID field 300 corresponds to similar data stored inauction ID field 400 and auction ID field 600 discussed below withreference to FIGS. 4 and 6, respectively.

Auctioned item field 302 contains, for each record of auction inventorydatabase 212, a listing of the item that is to be placed for bidding inthe auction identified by the corresponding auction identifier. Theauctioned item may be a product or a service. Products may be anytangible item of which the high bidder may take possession, for example,an automobile, furniture, clothing, antiquities and the like. Servicesmay be any intangible item to which the high bidder is entitled, such asa magazine subscription or house cleaning services. In the exampleoffered by FIG. 3, “product X” is to be placed for bid in auction “123”and “product Y” is to be placed for bid in auction “124.”

Open time/date field 303 contains the date and time at which thecorresponding auction is to be opened for bidding. In the exampleoffered by FIG. 3, auction “123” is to be opened at 9:00 AM on Jan. 1,1999. Likewise, close time/date field 304 contains the date and time atwhich the corresponding auction is to be closed (e.g. when no furtherbids will be accepted). In the example offered by FIG. 3, auction “124”is to be closed at 12:00 PM on Jan. 1, 1999. In one embodiment of thepresent invention, the data stored in close time/date field 304 for aparticular auction may be changed based on the submission of a requestand, preferably, a payment by a bidder to either extend the auction pastthe listed closing time or to close the auction early. The paymentamount may be determined by the auctioneer, or may be subject to aparallel auction in which one or more bidders bid for a price for whichthe original auction will be closed.

Minimum starting bid field 306 contains, for each record, datacorresponding to the minimum value that will be accepted for anauctioned item. For example, in auction “123,” the minimum bid that willbe accepted for “product X” is $125.00

FIG. 4 illustrates exemplary fields and the data stored therein forcurrent auction database 214. Each record in current auction database214 corresponds to a bid submitted by a bidder during an auction. Theexemplary fields of this database include auction identification (ID)field 400, bidder identification (ID) field 402, bid amount field 404and time received field 406. Auction ID field 400 contains datacorresponding to the data stored in auction ID field 300. In the presentexample, only data for current auction number “123” is displayed.However, current auction database 214 may contain data for one or moreprevious auctions and/or one or more auctions conducted simultaneously.In the alternative, there may be one or more such current auctiondatabases stored in data storage device 120, each containing archived,historical data corresponding to a previous auction or current datacorresponding to a current auction.

Bidder identification (ID) field 402 contains, for each record, a uniquecode corresponding to a bidder participating in a corresponding auction.The bidder identification code may be any alphabetic, numeric,alpha-numeric or other type of code, assigned by the auctioneer so thateach bidder participating in an auction on auction server 102 has aunique identifier. In the present example, one bidder participating inauction “123” has the bidder identification “MALWG018,” as displayed inthe first record of current auction database 214. Each code stored inbidder ID field 402 corresponds to a similar code stored in bidderidentification (ID) field 500 of bidder database 216, discussed inconjunction with FIG. 5 below.

Bid amount field 404 lists the currency value submitted as a bid by abidder for an auctioned item. For example, the first record of auctiondatabase 214 shows that for auction number “123” bidder MALWG018Bsubmitted a bid of $450.00 for “product X.”

Likewise, time received field 406 lists the date and time at which a bidwas submitted. The data in time received field 406 may be recorded byauction server 102 as the bid is received after being transmitted bybidder terminal 110 over network 104. Alternatively, the time and dateinformation may be encrypted by the bidder and transmitted along withthe bid to auction server 102. In this manner, if there is a networkdisruption or if auction server 102 temporarily stops operating, the bidmay still be accepted based on the encrypted date and time, even if thebid was actually received after the scheduled closing time. Upon receiptof the encrypted information, auction server 102 may containingprocessing instructions in program 222 to decrypt the encryptedinformation prior to storage in database 214. Schemes used forencrypting and decrypting are well-known to one of ordinary skill in theart. See, for example, Bruce Schneier, Applied Cryptography: Protocols,Algorithms, and Source Code in C (2d Ed., John Wiley & Sons, Inc.,1996).

FIG. 5 illustrates exemplary fields and the data stored therein forbidder database 216. Bidder database 216 generally stores data specificto each bidder registered to participate in an auction conducted onauction server 102. The exemplary fields of this database include bidderidentification (ID) field 500, historic participation level field 502,bidder name field 504, financial account identifier field 506 andcontact information field 508.

Bidder identification (ID) field 500 preferably contains a uniqueidentifier for each bidder that has registered to participate inauctions conducted on auction server 102. The data stored in bidder IDfield 500 is further preferably assigned by the operator of auctionserver 102 to uniquely identify each individual that has registered tosubmit bids. Alternatively, the bidder identifier may be determined bythe bidder. The data may be any alphabetic, numeric, alpha-numeric orother code as discussed above with regard to bidder ID field 402.

Historic participation level field 502 contains a value determined byauction server 102 or an operator of auction server 102. This value actsas a rating for the bidder. The value may be determined from thebidder's previous bidding activities on auction server 102. For example,the value may correspond to the number of previous auctions in which thebidder submitted a greatest bid, the number of previous auctions inwhich the bidder submitted a competitive bid or some combination of thetwo. Other factors may be used to determine the values historicparticipation level field 502.

Bidder name field 504 contains the name of the bidder corresponding tothe bidder identifier. In the present example, the first record ofbidder database 216 indicates the “John Doe” has been assigned bidderidentifier DOEQ29J.

Financial account identifier field 506 contains data corresponding to afinancial account number, such as a credit card account number or achecking account number, from which a value of a bid submitted by thebidder is to be deducted. In the present example, the first record ofbidder database 216 indicates that John Doe owns an accountcorresponding to financial account identifier number1234-1234-1234-1234. Other data, such as a bank or credit card companyidentifier and an expiration date of the financial account may beincluded in this field, or may be stored in another field (not shown).The information stored in financial account identifier field 506 mayfurther be used to credit a reward given to the bidder or to deduct apenalty charged to a bidder, discussed further below.

Contact information field 508 contains data preferably corresponding toa post office address for each bidder. The data may contain the biddersstreet address and city and state of residence. This information may beused as a delivery address for an auctioned item that a bidder has won.It may be further used in processing a transaction with a financialinstitution holding the financial account indicated in financial accountidentifier field 206. The transaction is preferably processed by auctionserver 102 in communication with payment processing server 108. Otherdata, such as a bidder's telephone number or e-mail address may bestored in contact information field 508 or in another field (not shown).

FIG. 6 illustrates exemplary fields and the data stored therein foroffer rules database 218. Offer rules database 218 contains dataaccessed by auction server 102 during an auction to determine when areward offer should be made to a bidder. The exemplary fields of thisdatabase include auction identification (ID) field 600, requiredconditions field 602, offer message field 604, offer recipient rulesfield 606 and Reward ID field 608.

Auction identification (ID) field 600 contains data corresponding to anauction identifier for an auction conducted on auction server 102. Theauction identifier is determined as discussed above with respect toauction ID field 300 and auction ID field 400.

Required conditions field 602 contains, for each record, one or moreconditions that must be met in order for a reward offer to be made to abidder who submitted a bid during an auction. As indicated in FIG. 6,such conditions may require, for example, that (i) no bid has beenreceived during a current auction for over 30 minutes, (ii) the high bidin a current auction is less than $300.00 after the third hour of suchauction and/or (iii) the high bid submitted during a current auction isless than $450.00. Other such conditions in which offers are made tobidders in order to encourage competitive bidding may be determined bythe auctioneer and stored in required conditions field 602.

Offer message field 604 contains data corresponding to text that will betransmitted to a qualified bidder participating in a current auction ifthe corresponding condition is met. The text preferably lists the rewardto be given during the current offer and the action the bidder must taketo earn the reward.

Offer recipient rules field 606 lists the bidders to whom the offermessage in corresponding offer message field 604 will be transmitted ifthe corresponding condition is met. The offer recipient rules may beestablished by the auctioneer, the owner of the auctioned product or athird party who is offering the reward.

Reward identifier field 608 contains a reward identifier correspondingto a reward to be given to a bidder if the bidder accepts the offer forthe reward. The data in reward identifier field 608 is established in asimilar fashion to the data stored in reward identifier field 700,discussed below with regard to FIG. 7.

FIG. 7 illustrates exemplary fields and the data stored therein forreward rules database 220. Reward rules database 220 contains dataaccessed by auction server 102 during an auction to determine when areward should be provided to a bidder. The exemplary fields of thisdatabase include reward identifier field 700, reward supplier field 702,reward description field 704 and reward rules field 706.

Reward identifier field 700 contains a reward identifier correspondingto a reward to be given to a bidder for a bid submitted during anauction. The reward identifier may be any alphabetic, numeric,alphanumeric, or other code which preferably is uniquely assigned 102 toeach category of rewards by the auctioneer or auction server.

Reward supplier field 702 lists, for each reward identifier, the partywho is supplying the reward. Typically the reward may be supplied by theauctioneer. However, in one embodiment of the present invention, thereward supplier may be a third party, such as a credit card company, whomay supply the reward automatically if the bidder agrees to file acredit card application with the company. In such an embodiment, thethird party may first check the credit history of the bidder usinginformation supplied by auction server 102 from bidder database 216before making the offer. Examples of other third parties include (i) atelecommunications company who may offer to supplement the pecuniaryvalue of a bidder's bid if the bidder agrees to switch her long distancetelecommunications carrier to the third party or (ii) an insurancecompany who may offer a reward to a bidder if the bidder agrees topurchase insurance from the company. Rewards supplied by third partiesmay include a value of currency, a supplement to the bid, a rebate onthe product, an amount of frequent flier miles, a second product, awarranty for the product, free shipment of the product if the bid is thegreatest bid, and the like. A supplement to the bid is an amount bywhich a bid is increased. For example, if a bid is for $50.00, and asupplement to that bid is $5.00, then the bid is increased to $55.00with the supplement. The rewards offered by third parties may further beconditioned upon the bidder submitting the greatest bid.

Reward description field 704 contains a description of the reward to begiven to a bidder. The reward may be any product, service or currencyamount that the reward supplier sees fit to offer the bidder.

Reward rules field 706 contains a description of the one or more rulesthat must be met before a bidder may automatically receive the reward.These rules are preferably established by the auctioneer, but may beestablished by the reward supplier or the owner of the auctioned productif different than the auctioneer. Once the rules have been met, thebidder will receive notification that he has earned the reward.

In addition, reward rules field 706 may further contain one or morerules in which a penalty will be assessed against a bidder. The penaltyis provided in order to discourage non-competitive bidding behavior. Anexample of a rule in which a penalty will be provided is where thebidder submits a bid that is less than the minimum starting bid listedin minimum starting bid field 306 for the auction. Another example iswhere a bidder submits a bid that is lower than a previously submittedbid. Other examples will be apparent to one of ordinary skill in theart. Examples of penalties include, barring the bidder from submittingbids for a particular auction or for a predetermined amount of time,limiting the number of bids the bidder may submit, or charging thebidder's financial account for a predetermined currency amount.

Turning now to FIG. 8, reward offering process 800 is continuouslyperformed during a given auction session by processor 200 in conjunctionwith processing instructions stored in program 222 of data storagedevice 210. Process 800 is further performed for each auction listed inauction ID field 600 that is conducted on auction server 102. Process800 begins at step 802 where processor 200 is programmed to retrieve therequired auction conditions listed in field 602 of database 218 for acurrent auction. At step 804, processor 200 retrieves the currentauction data stored in fields 404 and 406 of current auction database214. At step 806, processor 200 correlates the retrieved data andcompares it to the required auction conditions. If the current auctiondata satisfies the required auction conditions, process 800 continues tostep 808. Otherwise process 800 ends and is reset to step 802.

At step 808, processor 200 retrieves from offer recipient rules field606 each offer recipient rule stored for the subject auction and forwhich the required conditions have been satisfied. At step 810,processor 200 determines, based on the retrieved rules, which of thebidders participating in the subject auction are to receive thecorresponding offer message stored in offer message field 604. At step812, the qualified bidders contact information and/or financial accountidentifier is retrieved by processor 200 from bidder database 216 whenthis information is necessary to send the offered reward to the bidder.At step 814, the corresponding offer message stored in offer messagefield 604 is transmitted to the qualified bidders from communicationport 208 over network 104 to the qualified bidders terminals 110.

At step 816, processor 200 determines whether the offer was accepted bya bidder. If the offer is not accepted, process 800 ends and is reset tostep 802. If the offer is accepted by a bidder, then at step 818, thereward is assigned to the bidder and is, for example, sent to thebidder's address, added to the bidder's next bid or credited to thebidder's financial account, depending on the type of reward. Process 800then ends and is reset to step 802.

Referring now to FIG. 9, a single bidder reward process 900 iscontinuously performed during a given auction session by processor 200in conjunction with processing instructions stored in program 222 ofdata storage device 210. Process 900 may be performed during any or allauctions, as determined by the auctioneer to be appropriate.

Process 900 begins at step 902 when a bid is received from a bidderterminal 110, transmitted over network 104 and received viacommunication port 208. As described above, the bid information maycontain a current auction identifier, the bidder identifier, a pecuniaryvalue of the bid and, optionally, an encrypted date and time at whichthe bidder transmitted this information. After the bid information isstored in current auction database 214, the process continues to step904 where processor 200 determines whether the auction for which the bidis submitted is open. This is accomplished by referencing the timestored from signals received from clock 206 and comparing the currenttime to the times stored in open date/time field 303 and close date/timefield 304. If the auction is open the process continues to step 906,otherwise process 900 ends and is reset to step 902.

At step 906, processor 200 determines whether the bidder submitting thebid has sufficient funds or credit to pay the currency value of the bid.This is accomplished by retrieving the financial account identifierstored in field 506 which corresponds to the bidder identifier.Processor 200 then communicates with payment processing server 108through communication port 208 and over network 104 to determine whetherthe financial account has sufficient funds to cover the bid amount. Ifthe bidder has sufficient funds or credit, process 900 continues to step908. Otherwise, process 900 ends and is reset to step 902. In analternate embodiment, step 906 may be deferred until after the close ofthe auction. Other methods for determining whether the bidder hassufficient funds will be understood by those skilled in the art.

At step 908, processor 200 determines, in accordance with at least oneexemplary reward rule, whether the received bid is greater than thecurrent high bid. Those skilled in the art will understand that thefollowing illustrated method is likewise applicable to other types ofreward rules. The determination is accomplished by retrieving all thebid values stored in bid amount field 404 of current auction database214 and comparing them to the received bid. If the received bid is lessthan the current high bid, process 900 optionally continues to step 909where a penalty may be applied against the bidder, after which process900 ends and is reset to step 902. If, however, the received bid isgreater than the current high bid, then the exemplary reward rule hasbeen met and process 900 continues to step 910.

It should be apparent to one of ordinary skill in the art that variousadditional or substitute reward rules may be applied at step 908. Forexample, instead of a reward rule that requires that the received bid isgreater than a current high bid, the auctioneer may provide for suchalternate reward rules as: (i) the bidder submits a bid within apredetermined time from the submission of a previous bid, (ii) thebidder must submit greater than a predetermined number of increasingbids during the course of the auction (e.g. each of the bidder's bids isgreater than the former), (iii) the bidder's bid must be greater thanany previous bid by at least a predetermined bid spread, (iv) thegreatest bid for the auction must be greater than $500.00, (v) thebidder must have participated in greater than a predetermined number ofprevious auctions, (vi) the bid is submitted after a predeterminedamount of time from a previous bid, (vii) random bidders may be selectedto receive a reward. Other such conditions will be apparent and arecontemplated to be within the scope of the present invention.

At step 910, the bid information is stored in the appropriate fields ofcurrent auction database 214. Then, at step 912, processor 200 retrievesthe reward rules corresponding to the current auction as stored inreward rules field 706 of reward rules database 220. At step 914,processor 200 compares the received bid to the reward rules to determineif the bidder is qualified to receive a reward based on her bid. If so,process 900 continues to step 916 where the reward is provided to thebidder, after which process 900 ends and is reset to step 902. If not,process 900 is likewise ended and reset to step 902.

Referring now to FIGS. 10A-10B, a multiple bidder reward process 1000 isperformed by processor 200 in conjunction with processing instructionsstored in program 222 of data storage device 210. Process 1000 may beperformed during any or all auctions as determined by the auctioneer tobe appropriate.

Process 1000 begins at step 1002 when a bid is received from a bidderterminal, transmitted over network 104 and received via communicationport 208. As described above, the bid information may contain a currentauction identifier, the bidder identifier, a pecuniary value of the bidand, optionally, an encrypted date and time at which the biddertransmitted this information. After the bid information is stored incurrent auction database 214, the process continues to step 1004 whereprocessor 200 determines whether the auction for which the bid issubmitted is open. This is accomplished by referencing the current timedetermined from signals received from clock 206 and comparing thecurrent time to the times stored in open date/time field 303 and closedate/time field 304. If the auction is open the process continues tostep 1006, otherwise process 1000 ends and is reset to step 1002.

At step 1006, processor 200 determines whether the bidder submitting thebid has sufficient funds or credit to pay the currency value of the bid.This is accomplished by retrieving the financial account identifierstored in field 506 which corresponds to the bidder identifier.Processor 200 then communicates with payment processing server 108through communication port 208 and over network 104 to determine whetherthe financial account has sufficient funds to cover the bid amount. Ifthe bidder has sufficient funds or credit, process 1000 continues tostep 1008. Otherwise, process 1000 ends and is reset to step 1002.

At step 1008, processor 200 determines, in accordance with an exemplaryreward rule, whether the received bid is greater than the current highbid. This is accomplished by retrieving all the bid values stored in bidamount field 404 of current auction database 214 and comparing them tothe received bid. If the received bid is less than or equal to thecurrent high bid, process 1000 continues to step 1009 where a penaltymay be assessed against the bidder, after which process 1000 ends and isreset to step 1002. If, however, the received bid is greater than thecurrent high bid, process 1000 continues to step 1010.

As discussed above with regard to step 908, the reward rule employed atstep 1008 is merely exemplary. Additional or alternate reward rules maybe employed.

At step 1010, the bid information is stored in the appropriate fields ofcurrent auction database 214. Processor 200 then compares the bidagainst the reward rules stored in reward rules field 706 of rewardrules database 220. If the bid satisfies the conditions of one or moreof the reward rules, the bidder is given the reward at step 1012, andprocess 1000 continues to step 1014.

At step 1014, a bid from a second (or subsequent) bidder terminal istransmitted over network 104 and received via communication port 208. Asdescribed above, the bid information may contain a current auctionidentifier, the bidder identifier, a pecuniary value of the bid and,optionally, an encrypted date and time at which the bidder transmittedthis information. After the bid information is stored in current auctiondatabase 214, the process continues to step 1016 where processor 200determines whether the auction for which the bid is submitted is open.This is accomplished by referencing the current time determined fromsignals received from clock 206 and comparing the current time to thetimes stored in open date/time field 303 and close date/time field 304.If the auction is open the process continues to step 1018, otherwiseprocess 1000 ends and is reset to step 1002.

At step 1018, processor 200 determines whether the second biddersubmitting the second bid has sufficient finds or credit to pay thecurrency value of the bid. This is accomplished by retrieving thefinancial account identifier stored in field 506 which corresponds tothe second bidder identifier. Processor 200 then communicates withpayment processing server 108 through communication port 208 and overnetwork 104 to determine whether the financial account has sufficientfunds to cover the bid amount. If the second bidder has sufficient fundsor credit, process 1000 continues to step 1020. Otherwise, process 1000ends and is reset to step 1002.

At step 1020, processor 200 determines, based on an exemplary rewardrule, whether the second received bid is greater than the current highbid. This is accomplished by retrieving all the bid values stored in bidamount field 404 of current auction database 214 and comparing them tothe second received bid. If the second received bid is less than orequal to the current high bid, process 1000 continues to step 1021 wherea penalty may be assessed against the second bidder, after which process1000 ends and is reset to step 1002. If, however, the second receivedbid is greater than the current high bid, process 1000 continues to step1022.

As discussed above with regard to steps 908 and 1008, the reward ruleemployed at step 1020 is merely exemplary. Additional or alternatereward rules may be employed.

At step 1022, the bid information is stored in the appropriate fields ofcurrent auction database 214. Processor 200 also retrieves correspondingreward rules from reward rules database 220. At step 1024, processor 200then compares the second bid against the retrieved reward rules. If thesecond bid does not satisfy the reward rules, process 1000 ends and isreset to step 1002. However, if the second bid satisfies the conditionsof one or more of the reward rules, the bidder is given the reward atstep 1026, after which process 1000 ends. In an alternate embodiment,the reward assigned to the first bidder may be revoked as part of step1026.

While the best mode contemplated for carrying out the invention has beendescribed in detail in the foregoing, those of ordinary skill in the artto which the instant invention relates will recognize variousalternative designs and embodiments for practicing the invention. Inparticular, the methods and systems disclosed above, though discussed interms of an on-line embodiment, are equally applicable to enhancecompetitive bidding in any conventional form of auctioning. Furthermore,the databases and data stored therein may be rearranged or combined intoequivalent structures. Finally, it is to be understood that a reward maybe provided during a current auction or may be awarded subsequent to thecurrent auction. Accordingly, it is to be understood that the foregoingdescription is provided for illustrative purposes only and does notlimit the scope of the instant invention, as defined by the appendedclaims.

1. A method for providing a reward to a bidder participating in anauction, the method comprising: identifying a product subject to biddingduring an auction session; receiving a bid for the product from a bidderduring the auction session; determining, based on a reward rule, whetherthe bidder is qualified to receive a reward, and if the bidder isqualified: transmitting, to the bidder, an indication that the bidder isqualified to receive the reward. 2-66. (canceled)